Minnesota's unemployment rate rose .10 percent to 3.8 last month. The state's jobless rate remains well below the national level, and posted a smaller increase than the nation as a whole in November. But layoffs are rising dramatically among the state's white collar workers, historically a group that has been less vulnerable to job cuts.

Last August Randy Kelsey lost his job as a senior quality consultant at Cargill after 26 years with the firm.
(MPR Photo/Bill Catlin)

The latest unemployment numbers were better than state economist Tom Stinson feared. Still, Stinson says Minnesota is losing jobs at a faster pace than the U.S. as a whole.

"Our proportionate share of the U.S. job loss since August would be a little bit less than 20,000 thousand jobs, and we've lost 25,000 jobs," according to Stinson. "We've closed the gap a little bit. I think some of that's due just to the unseasonable weather we had there, but Minnesota still is underperforming the U.S. economy."

Though warm weather has helped preserve construction jobs, there remain big increases in layoffs among white-collar workers. According to state statistics, initial claims for jobless benefits among white-collar workers have doubled or more in recent months.

Professional, technical and managerial employees saw the biggest jump in third quarter claims for jobless benefits compared to last year of any occupational group.

Jay Mousa with the state Department of Economic Security says the statistics suggest companies are cutting into muscle.

"In a downturn, the first to go are people who are temporary, people with low seniority, with less experience, and now you're getting to see the layoff impacting people with more skills, people with higher experience," says Mousa.

Mousa says the decision to cut more experienced employees indicates a pessimistic economic outlook among corporate managers. He says the rise in white-collar layoffs reflects the economic shock from Sept. 11 to the state's air transportation industry, but also broader economic problems.

"Troubles in the high-tech sector, and business services, and general weakness in the economy. It also reflects the fact that it's spreading from manufacturing into different industries, including the services industry, where many of the white-collar people are employed," according to Mousa.

Last August, Randy Kelsey lost his six-figure income as a senior quality consultant at Cargill after 26 years with the firm. He says the news came as a surprise.

"My performance had always been at or above expectations, and I was involved in virtually every way the organization compensated and rewarded people, and if you're being well rewarded, well compensated, and have a lot of the attributes of the organization at your disposal, why would you ever think you'd be a candidate to be whacked?" Kelsey says.

But Kelsey also says Cargill was able to save more by cutting him as opposed to someone more junior who makes less.

Princeton University labor economist Henry Farber says changes in the U.S. economy underlie the trend. Services have become more important, and manufacturing concerns may require more white collar expertise, as they produce more products like electronics as opposed to steel.

"There's no question that white-collar workers have become more vulnerable to layoffs than they were before. But by no means are they as vulnerable as blue-collar workers," he says. "There's more white-collar workers than there used to be, so they're spread more broadly through the economy. And they're now in places that are vulnerable, whereas perhaps before, they weren't in so many places."

For Randy Kelsey, surprise has not turned to bitterness, but he says his situation seems tougher on his two daughters than on him or his wife.

"My daughters are probably a little more concerned about it, particularly with the holidays, both of them have said what they want for Christmas is their dad to get a job. It's like a knife in your heart," he says.

Jay Mousa with the state Department of Economic Security says the job market may be in a slump, but the demand for highly skilled workers will not go away in an economy built increasingly on knowledge and technical skill.